Speculative Tesla owned Uber-like service impact on Tesla's Mission and Valuation?

[SteveG3]

Another announcement underscoring how Tesla's lead position in electric vehicles may well be its biggest competitive advantage in taking autonomous fleet market share. This comes on top of several nations announcements this year re banning fossil fuel vehicles c. 2040. There are city centers where this will not be allowed sooner.

12 major cities pledge to only buy all-electric buses starting in 2025

Policies will vary by country, state/province, city, but it is likely that there will not be a shortage of regions that either only allow electric autonomous cabs, or even regulate them like a utility (i.e., choosing a small number of providers, automakers, to cover the city's needs... hard to imagine, the providers chosen by such cities will not overwhelmingly be those who have the capacity to deliver a high quality EV fleet. As Adam Jonas has pointed out, national interest may play a role in deciding what a high quality EV is. i.e. German automakers will have a leg up if German cities license the autonomous fleet business like a utility). Tesla's track record and production capacity for electric vehicles will likely be a significant competitive advantage in supplying these vehicles even ~5 years from now when the technology may become street legal. Even in regions that may not have laws against a fossil fuel autonomous cab, to some extent individual consumers will vote with their wallets for sustainable energy. A likely cheaper cost for an EV autonomous ride than an ICE one will help EVs win in such wallet voting.

 

[SteveG3]

Want to note another potentially major change in how this market will develop since the last time I posted here.

In a Ted Talk this spring, Elon said,

"The affordability of going in a car will be better than that of a bus. Like, it would cost less than a bus ticket."

Tesla Network: Elon Musk elaborates on autonomous ride-sharing, says will eventually be cheaper than public transport

Things could change, but, Elon's most recently shared vision of where autonomous ride sharing is going (for areas currently served with public transportation) will be a real boon to the consumer, but, probably less of an economic windfall to the service providers, including Tesla, than many of us have had in mind... at least in terms of revenue from fares. Some have suggested the ride-sharing networks will offer a large business opportunity to the provider by offering services (music, video, etc.) to the consumer while in the vehicle. Much more challenging to forecast potential revenues and margins here, whether for fares or in vehicle services, than traditional sales of vehicles to consumers.

 

[SteveG3]

Saw a YouTube video today taking the $50k Elon suggested FSD might sell for and multiplying that by 20 Million vehicles as potential 2030 annual production. Add software profit margins, and there you have about $750B in profits in 2030 from FSD.


I’ve seen this and similar enthusiasm repeatedly, and it makes me wonder... is nobody considering all the reasons this and similar scale scenarios are extremely improbable even if Tesla is first to FSD and has better tech initially?



I want to just focus on one reason that to me seems particularly like an elephant in the room. It’s a potential bombshell re how FSD profitability may play out, and I don’t believe I’ve seen it mentioned anywhere. Perhaps it’s been brought up on the main thread here, I can’t keep up with it.

Elon has publicly stated quite clearly at least twice in the past year or so that he sees the technology of FSD becoming as trivial to accomplish as NAV on our phones (Google Maps, etc) by 2030.

To me, that very strongly suggests that if Elon is correct, by 2030, FSD will be about as available on new vehicles as those NAV apps are for our phones... nearly ubiquitously.

Now, if Tesla does enter the market with FSD first, or among the very first, they will initially be able to charge $50k (or more) for FSD, and I think they will (at least for FSD purchases that include the right to use the vehicle commercially as a Robotaxi). Building in time for regulatory approval, this will probably be hitting significant levels in about 3 years, so at total production volumes of 2-4M per year, though I doubt they will all be sold for commercial Robotaxi use.


Longer term though, think about the implications to FSD profits if Elon is correct. Pricing of FSD would seem set for a massive contraction.


Elon’s projection is not a sure thing, but 1) this doesn’t seem to get considered at all as even a possibility in discussions of FSD business prospects, 2) even if not trivial tech in 2030... if Elon’s off the mark, is he off to the point that there aren’t at least several companies who’ve developed the tech, 3) how off might he be... 5 years, 2 years, 8 years? what happens to the value of a biotech with one big drug coming off patent in a few years? To be clear, I mean that last analogy re a Tesla FSD business, not Tesla as a whole.

There’s many reasons to be bullish re Tesla at the current price, and I still have a long position, but this and several other dynamics I didn’t include in this post (and I’ve hardly ever seen discussed), suggest a very wide array of possible FSD profitability outcomes for Tesla.

 

[replicant]

End of the line for Uber

Uber is a bezzle ("the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it"). Every bezzle ends.

Uber's time is up.

 

[replicant]

End of the line for Uber

Thread from the blogger:

https://twitter.com/x/status/1425139419195998213

If his source is right about Uber's upcoming bankruptcy (expected this year), this could have a major impact on TSLA:
- Negative: Wall Street might have even more difficulties estimating the value of FSD and Tesla's ride-sharing program
- Positive: no more entrenched incumbent in the on-demand mobility market... or a possible acquisition to get data (best charger location, hot spots, future subscribers...), maybe some engineers to hire... or just a way to prevent FAAMG or Intel-Mobileye from partnering w/ other manufacturers in this areas.

 

[replicant]

Introducing the Waymo Driver to New York City’s streets

The Waymo Driver has tested in dozens of cities spanning a diverse range of climates and topographies. Starting tomorrow, we’ll build on these learnings as we begin to <a href="https://blog.waymo.com/2020/09/the-waymo-driver-handbook-mapping.html">map</a> in New York City for the first...

blog.waymo.com